Correlation Between Commerzbank and Everyman Media
Can any of the company-specific risk be diversified away by investing in both Commerzbank and Everyman Media at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Commerzbank and Everyman Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and Everyman Media Group, you can compare the effects of market volatilities on Commerzbank and Everyman Media and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Commerzbank with a short position of Everyman Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and Everyman Media.
Diversification Opportunities for Commerzbank and Everyman Media
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commerzbank and Everyman is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and Everyman Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everyman Media Group and Commerzbank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Commerzbank AG are associated (or correlated) with Everyman Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everyman Media Group has no effect on the direction of Commerzbank i.e., Commerzbank and Everyman Media go up and down completely randomly.
Pair Corralation between Commerzbank and Everyman Media
Assuming the 90 days trading horizon Commerzbank AG is expected to generate 1.13 times more return on investment than Everyman Media. However, Commerzbank is 1.13 times more volatile than Everyman Media Group. It trades about 0.09 of its potential returns per unit of risk. Everyman Media Group is currently generating about -0.06 per unit of risk. If you would invest 899.00 in Commerzbank AG on December 5, 2024 and sell it today you would earn a total of 1,172 from holding Commerzbank AG or generate 130.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerzbank AG vs. Everyman Media Group
Performance |
| Timeline |
| Commerzbank AG |
| Everyman Media Group |
Commerzbank and Everyman Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and Everyman Media
The main advantage of trading using opposite Commerzbank and Everyman Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank position performs unexpectedly, Everyman Media can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Everyman Media will offset losses from the drop in Everyman Media's long position.| Commerzbank vs. Indutrade AB | ||
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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